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1905 DIGILAW 122 (ALL)

Maharaja of Benares v. Har Narain Singh

1905-05-26

BURKITT, STANLEY

body1905
JUDGMENT : Stanley, J.:— Two grounds of appeal have been pressed before us. The first, that upon a true construction of the kabuliat and security bond, upon the latter of which documents the defendants-respondents have been sued in the suit out of which this appeal has arisen, the appellant is entitled to recover interest on the rent in arrears. The second ground is that payments which have been made by the lessee should be set off in the first instance against the interest payable by him and not against the principal. 2. In regard to the first of these questions it appears to us that the Court below came to a right conclusion, and for these reasons. Ordinarily the liability of a surety is co-extensive with that of the principal debtor. This indeed is provided for in section 128 of the Indian Contract Act, In the bond, however, upon which the plaintiff has sued, it appears to us that the liability of the sureties is confined to liability for the arrears of rent alone. After setting forth the lease, the defendants, the executants of the bond, covenant that “in case of default by the lessee and non-payment of the arrears by us, the sureties, the sarkar (i.e., the Maharaja) will have power to realise the arrears from us personally or by attachment, etc.” Here the obligation undertaken by the executants is confined to the arrears. 3. That would ordinarily mean the arrears of rent previously referred to in the instrument. This seems to be made clear by the last clause in the bond in which the following words appear:— “The responsibility for the annual rent till expiry of the entire term of the farm shall rest with us.” It seems to us that upon the true construction of the surety bond, the executants intended to be responsible for the rent and for the rent alone. If it had been in the contemplation of the parties to give security not merely for the arrears of rent but also for interest, it would, we think, have been so stated, and the passages in the bond to which we have referred, would have contained such words as “with interest thereon.” Therefore this is not, we think, a case to which the ordinary rule, according to which the liability of a surety is co-extensive’ with the liability of the principal, is applicable. On the first point, therefore, the appeal fails. 4. As regard the second point, the learned Subordinate Judge has applied moneys, which have been recovered from the lessee, in payment of the arrears of rent due and not in payment in the first instance of the interest recoverable from him in respect of such arrears. In this we think he was mistaken, It appears to be a well-settled practice of the Courts to appropriate payments made upon a bond first to the interest due thereon and thereafter, if any balance remain, to the principal. As an authority for this we would refer to the case of Luchmeswar Singh Bahadur v. Luti Ali Khan : [1871] 8 B.L.R., 110 and also to the case of Gooroo Doss Dutt v. Ooma Churn Boy : [1874] 22 W.R., 525. The appeal, therefore succeeds upon this point. Now the interest payable by the lessee amounted to more than the sum recovered from them, namely, Rs. 1,829-7-4. This amount must, therefore, be appropriated to the payment of interest. The result will be that the decree passed against the defendants must be increased by that amount, namely, Rs. 1,829-7-4. We accordingly to this extent allow the appeal, modify the decree of the Court below by awarding to the plaintiff this sum in addition to the sum already awarded. In other respects the decree will stand. We also think-that the plaintiff Is entitled to interest at 6 per cent, per annum from the date of the suit on the amount decreed. We so order. Under the circumstances we say nothing as to the costs of this appeal.